Committed to Responsibility

Distillers Urge Congress to Support CAFTA; Pact will Eliminate Tariffs on American spirits

June 12, 2005 08:00 PM

WASHINGTON, D.C. – In a letter sent to Members of Congress, The Distilled Spirits Council today encouraged Representatives and Senators to pass the Dominican Republic-Central American Free Trade Agreement (DR-CAFTA) during the 109th Congress. The DR-CAFTA will open the market immediately to U.S. exports, secure important protection for Bourbon and Tennessee Whiskey and solidify the status of Central American nations as important trading partners for the U.S. spirits industry. “The Distilled Spirits Council enthusiastically supports the DR-CAFTA because it is a state-of-the-art, comprehensive agreement,” said Dr. Peter Cressy, President of the Distilled Spirits Council. “We urge Congress to act quickly on this historic agreement, which will have a direct and immediate impact on the sale of U.S. made spirits products in Central American nations. The DR-CAFTA offers important protections for American products in a growing market, including the elimination of tariffs – which sometimes go as high as 40% ad valorem – and the protection of unique U.S. products, Bourbon and Tennessee Whiskey.” Under the provisions of the DR-CAFTA, tariffs on U.S. produced whiskey and gin will be immediately eliminated. Honduras will also eliminate immediately its current tariff of 15% on liqueurs. The Dominican Republic FTA will immediately eliminate the tariff on most American whiskies, specifically Bourbon and Tennessee Whiskey. All other tariffs will be phased out over 5, 10 or 15 years. “This will create a competitive advantage for U.S. producers of distilled spirits relative to other imported distilled spirits,” said Cressy. Over the last five years, U.S. direct exports of distilled spirits to Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and the Dominican Republic have grown by almost 85%, reaching over $3.9 million. The U.S.-Central American-Dominican Republic FTA will help ensure continued growth in U.S. spirits exports to the region. Since 1990, U.S. exports of distilled spirits worldwide have more than doubled, growing to over $716 million in 2004. In 2004, total U.S. exports of spirits increased by 22.1% over 2003 values. -30-
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